Warming Up To Free Trade In Canada

October 17, 1988

Even as the fall air grows increasingly chilly, Canadians are warming more and more to Prime Minister Brian Mulroney and his idea of creating the world`s largest open market with the United States. The latest opinion polls show Mulroney`s popularity rising and his ruling Conservative Party with a solid lead.

The Canadian election is still five weeks away, but Mulroney`s popularity makes it likely that the Conservatives will retain control of the House of Commons and that the free-trade pact with the U.S. will take effect Jan. 1. The world`s two largest trading partners will then begin a 10-year phaseout of tariffs and other trade barriers.

The agreement already has been approved overwhelmingly by the U.S. Congress and signed by President Reagan. What little opposition there was centered on concerns by some lawmakers that home-state industries will be damaged if Canadians continue to subsidize some exports such as wood products, hydroelectric power and potatoes.

But the treaty will allow American industries to seek protection under import relief laws if they can prove they are hurt by subsidized exports. Meanwhile, it will give us secure access to Canadian oil and natural gas and allow freer U.S. investment in Canada. The administration estimates the agreement will increase America`s output by $45 billion, add as many as 750,000 U.S. jobs and save consumers billions.

In Canada, the pact`s journey has been rockier. The Liberal Party, which controls the Senate, refused to approve it, forcing Mulroney to call an election for Nov. 21. Both the Liberals and the New Democratic Party have pledged to tear up the agreement if elected. Until recently, many Canadians, 80 percent of whom live within 100 miles of the U.S. border, feared that closer ties with this country would further blur their identity and homogenize their culture.

But more Canadians apparently are realizing they can preserve their unique culture and still boost prosperity through free trade. Besides increased investment and growth, the treaty will assure them entry to the world`s largest market in the event that future American politicians decide to throw up protectionist barriers to the rest of the world.

More Canadians are acknowledging that this treaty will benefit both nations without making Ottawa a suburb of Washington. That`s an encouraging trend that should carry through the Canadian election. Once the treaty is in effect, the United States and Canada can hold themselves up as a model and work to convince other countries that they too can profit with bilateral or multilateral agreements to foster trade.